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1 DPNC Insight CARO 2016 Vs 2015
| Date post: | 22-Jan-2017 |
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Business |
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DPNC Insight CARO 2016 Vs 2015
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COMPANIES AUDITOR’S REPORT ORDER (CARO) 2016
- Changes in CARO 2016 as compared to CARO 2015
Applicability Changes in CARO 2016 shall not be applicable to
Changed/ Removed/ New
Description Remarks
Changed A private limited company, not being a subsidiary or holding company of a public company, having a paid up capital and reserves and surplus not more than rupees one crore as on the balance sheet date and which does not have total borrowings exceeding rupees one crore from any bank or FI at any point of time during the financial year and which does not have a total revenue as disclosed in Scheduled III to the Companies Act, 2013 exceeding rupees ten crore during the financial year
Changes only in respect of applicability of CARO 2016 on Private limited company
Inventory
Changed/ Removed/ New
Description Remarks
Changed Whether physical verification of inventory has been conducted at reasonable intervals by the management and if any discrepancies noticed are properly dealt with or not
The requirement has been curtailed to physical verification and treatment of discrepancies noticed. The auditor does not need to report for physical verification procedure and records maintained by the company for inventories
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Loan Granted by Company
Statutory Dues
Changed/ Removed/ New
Description Remarks
Changed Whether the company is regular in depositing undisputed statutory dues including provident fund,employees' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated; where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned.(Amere representation to the concerned Department shall not be treated as a dispute).
Same as CARO 2015 except - No more requirement on reporting of IEPF (Investor Education and Protection fund)
Changed/ Removed/ New
Description Remarks
Changed Whether the schedule of repayment is stipulated, whether the repayment is regular or not. Whether the term and conditions of the grant of such loan are prejudicial to the interest of the company If the amount is overdue, then state the amount over due for more than 90 days and what steps company has followed.
The new CARO 2016 provides for the term and conditions of loan provided. The new CARO 2016 provides for overdue payment for more than 90 days instead outstanding of amount above the threshold limit of 1 lac
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Default in Repayment of Borrowings
Changed/ Removed/ New
Description Remarks
Changed Whether the company has defaulted in repayment of loans or borrowing to a financial institution, bank, government or dues to debenture holders? If yes, the period and amount of default to be reported (in case of defaults to banks, financial institutions, and government, lender-wise details to be provided);
Reporting also required of default of Loan or Borrowing taken from Government. It is also required to report the default lender wise.
Fund Utilization
Changed/ Removed/ New
Description Remarks
Changed Whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not, the details together with delays or default and subsequent rectification, if any, as may be applicable, be reported;
Utilization of money raised, whether used for intended purpose or not and why not, to be reported.
Fraud
Changed/ Removed/ New
Description Remarks
Changed Whether any fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated.
Reporting on fraud on the company is now restricted to fraud committed on it by the officer or employees of the company.
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Internal Control
Changed/ Removed/ New
Description Remarks
Removed Clause removed No Clause on Internal Control
Reporting on Accumulated Losses & Cash Losses
Changed/ Removed/ New
Description Remarks
Removed Clause removed No Clause on Accumulated Losses and Cash Losses
Guarantees given by Company
Changed/ Removed/ New
Description Remarks
Removed Clause removed No Clause on Guarantees given by company.
Fixed Assets
Changed/ Removed/ New
Description Remarks
New Whether the company holds title of immovable property held by the company, If not provides the details thereof
New CARO 2016 demands additional reporting for such immovable assets whose titles are not owned by the company.
New Clauses
Changed/ Removed/ New
Heading Description
New Reporting on compliance of Section 185 & 186 of the Companies Act 2013 Managerial remuneration
In respect of loans, investments, guarantees and security whether provisions of section 185 and 186 of the Companies Act 2013 have been complied with. If not, provide the details thereof. Whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated
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by the provisions of section 197 read with schedule V to the Companies Act? If not, the amount involved and steps taken by the company for securing refund of the same.
Changed/ Removed/ New
Heading Description
New Reporting on Nidhi Company Related Party Transactions
whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1:20 to meet out the liability and whether the Nidhi Company is maintaining ten percent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability; Whether all transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements etc., as required by the applicable accounting standards;
Changed/ Removed/ New
Heading Description
New Reporting on compliance of Section 42 and end use of funds
Whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of section 42 of the Companies Act 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not, provide the details in respect of the amount involved and nature of non-compliance; Whether the company has entered into any non-cash
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Reporting on Non-cash transactions with Directors or persons connected with him
transactions with directors or persons connected with him and if so, whether the provisions of section 192 of Companies Act 2013 have been complied with;
Changed/Removed/New
Heading Description
New Reporting on NBFC registration requirement
Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and if so, whether the registration has been obtained.
Unchanged Clause
Sr. No. Heading Description 1. Deposits Reporting In case the company has
accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, where applicable have been complied with? if not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?
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2. Cost records Reporting where maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, whether such accounts and records have been made and maintained;
Reasons to be stated for Unfavorable or qualified answers
Changed/Removed/New
Heading Description
Where, in the auditor's report, the answer to any of the questions referred to in
paragraph 3 is unfavorable or qualified, the auditor's report shall also state the reasons for such unfavorable or qualified answer, as the case may be.
Where the auditor is unable to express any opinion on any specified matter, his
report shall indicate such fact together with the reasons why it is not possible for him to give his opinion on the same.
Non-Applicability on CFS
Changed/Removed/New
Heading Description
CARO 2016 is not applicable to the auditor’s report on consolidated financial
statements.
DISCLAIMER
The information contained herein is in summary form by Dewan P.N. Chopra & Co., from sources believed to be reliable. While
the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties,
express or implied, as to the accuracy or completeness of such information. Recipients should conduct and rely upon their own
examination, investigation and analysis and are advised to seek their own professional advice. This document is not an offer,
invitation, advice, opinion or solicitation of any kind. We accept no responsibility for any errors it may contain or for any loss,
howsoever caused or sustained, by the person who relies on it.
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Website: www.dpncindia.com
LinkedIn: www.linkedin.com/company/dewan-p-n-chopra-&-co-
Email: [email protected]
Phone Number: - +91-11-24645891 / 92 / 93
Address: D 295, Defence Colony New Delhi – 110024
